Sunday, March 24, 2019

Bill Mitchell — The mainstream old guard tell it as it is – and how different that is to MMT

While many mainstream economists have been coming out to defend their reputations against the growing awareness that Modern Monetary Theory (MMT) presents a direct challenge to their hegemony, some of the mainstream haven’t responded at all and continue to confirm what the standard mainstream macroeconomics is about and how far removed from MMT it really is. The MMT critics claim that there is nothing new in MMT (‘we knew it all along’) in one breathe, and then ‘MMT is crazy dangerous’ in another, without seemingly realising how conflicted that juxtaposition is. But when leading mainstreamers, who are not engaging with the public MMT discussion going on, publish their Op Ed pieces, we gain an insight into what the mainstream is really about despite all the attempts by other mainstreamers to co-opt as much of MMT as they can while still claiming it is crazy. A recent Op Ed article in the Wall Street Journal (March 20, 2019) – The Debt Crisis Is Coming Soon – by Harvard economics professor Martin Feldstein – is a great demonstration of the DNA of mainstream macroeconomics. MMT presents a diametrically opposed view to this standard mainstream analysis. There is no correspondence possible between the two positions....
Bill Mitchell – billy blog
The mainstream old guard tell it as it is – and how different that is to MMT
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia


AXEC / E.K-H said...

MMT vs WSJ: Another futile exercise in moron bashing
Comment on Bill Mitchell on ‘The mainstream old guard tell it as it is ― and how different that is to MMT’

Bill Mitchell first comments on actual economic trends and how they refute mainstream economics and confirm MMT. Then he turns to a recent Op-Ed about MMT in the Wall Street Journal: “The problem with Martin Feldstein, mainstream economist and sometime film actor, is that the record has been stuck for decades and he doesn’t see to get that all he produces is noise.”

To complain about the noise production of economists is either naive or insincere. It is common knowledge that the Wall Street Journal is not an organ for the dissemination of scientific truth but that it is the Pravda of the Oligarchy. And it is common knowledge that academics who op-ed in the mainstream media are fake scientists who fit Lenin’s definition of useful idiots. The mission of these folks is not enlightenment but entertainment, disinformation, agenda pushing, opinion-leading, and the instigation of lively argumentative dog fights.

Of course, not one of the Op-Ed trolls from Feldstein to Krugman can be taken seriously. That’s not at all the problem. The problem with these folks is that they abuse and corrupt the reputation of science.

What gets lost in the actual MMT vs Mainstream noise is that economics is not a science, to begin with and that both MMT and the Mainstream is proto-scientific garbage. Worse, what gets lost is that the four major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and that all get the foundational concept of the subject matter ― profit ― wrong.

Because of this, all debates between the different camps are a ritualistic exchange of worn-out slogans and the outcome is predictable with absolute certainty: the status quo, i.e. the scientifically unacceptable but politically convenient pluralism of false theories, is secured for another day.#1

Of course, there are slight qualitative differences with regard to the degree of garbishness. MMT is clearly superior to mainstream economics because it is macrofounded.#2 Microfounded mainstream economics marks the absolute zero of scientific competence.

However, being superior to mainstream economics is not such a great feat because it is impossible to be worse.#3 Fact is that MMT, too, is axiomatically false.

From this follows that neither MMT nor Mainstream policy guidance has sound scientific foundations: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)

Economists do NOT have the true theory. Economics is a failed science. Economics is political agenda pushing. MMT is soapbox economics just like Walrasianism, Keynesianism, Marxianism, Austrianism.

The lethal blunder of MMT is located in the sectoral balances equation (I−S)+(G−T)+(X−M)=0. Bill Mitchell easily refutes the WSJ/NYT Op-Ed morons but it is impossible for him to refute the proof of the foundational inconsistency of MMT.#4, #5 When mainstream blatherers are debunked and the dust settles and the noise ebbs away it becomes clear that MMT is just another instance of the 200+ years old systemic corruption of economics by political agenda pushers.#6

Egmont Kakarot-Handtke


Noah Way said...

Please don't feed the link-spamming troll.